15/04/2015

By Matt Dick, Partner at D Young & Co.


In an increasingly digital and global economy, intellectual property (“IP”) is often the most lucrative asset on a company’s balance sheet. Whereas most IP rights are of limited duration (e.g. copyright generally lasts for the creator’s life plus seventy years), a registered trade mark – assuming it remains distinctive and continues to be used on the market – can potentially last forever. The oldest UK trade mark registration (a logo for Bass beer) dates back to 1876.

In the absence of ‘image rights’ per se, which are not strictly recognised under English law, many celebrities rely on trade mark registrations to protect the integrity of their personal brand, a move most recently pursued by Professor Stephen Hawking who applied to register his name as a trade mark last month. Although ‘unregistered rights’ can sometimes be relied on to prevent unauthorised use of a celebrity’s image (as was successfully done most recently in January 2015 by the pop star Rihanna against Top Shop), obtaining a trade mark registration is by far the simplest (and usually cheapest) means of ensuring your brand is protected.

IP should be one of the first things a new business thinks about before it launches. When conducting their due diligence, potential investors, buyers and their advisers will investigate very carefully the extent of IP that a business has registered in its name. It’s a common question on Dragons’ Den, and those seeking investment are often keen to stress that they have a patent pending, or other relevant IP rights in their ownership.

Trade marks should be near the top of the ‘to do’ list for a new business: after all, without a distinctive brand, how will consumers differentiate your products or services from competitors who are offering similar? It is worthwhile earmarking a portion of any initial funding for getting branding issues sorted – whether that’s employing the services of a brand consultant to come up with a new name or logo; or, once you have one in mind, undertaking relevant clearance searches to ensure the brand is free for use and, ideally, registration.

Failure to ‘clear the way’ in this respect can have costly ramifications: the owners of the YOUVIEW television service spent around £70 million to bring the brand to market, and subsequently invested over £29 million in advertising and promoting it – but expensive litigation with the proprietor of the earlier YOUR VIEW mark (a telecommunications company) meant that YOUVIEW nearly had to drop the brand altogether.

It’s not just third party rights that need to be considered. If a brand name is too descriptive it will not be prima facie registerable as a trade mark: other traders need to be able to use such descriptive terms in order to sell their products. It is possible to overcome such hurdles in certain circumstances, but only if the objectionable mark has been used to such an extent that consumers have been educated to see it as distinctive of the owner’s goods/services and no other’s. That can be a difficult (and costly) exercise.

Established businesses also need to consider branding issues, particularly if freshening up existing brands with a new name or logo, or developing new brands to compete more effectively in a crowded marketplace. The many pitfalls (both commercial and legal) of launching a new brand should always be considered before taking the plunge.

For every successful re-brand in the UK (e.g. ‘Mr Dog’ dog food becoming ‘Cesar’; ‘Opal Fruits’ changing to ‘Starburst’), there are renowned failures (Royal Mail changed its name to ‘Consignia’ in 2001 and back to Royal Mail 18 months later; Pricewaterhouse Coopers’ proposed re-branding to ‘Monday’ in 2002 cost £75 million and lasted barely a month).

With modern commerce being truly global, brand owners should aim to have worldwide brand cohesion wherever possible, though this can generate problems. Cultural/linguistic connotations need to be considered in every country where it will be used. Consult an international branding expert to ensure there are no obvious faux pas (NOVA may be a great brand name for cars in the UK; but in Spain and much of South America ‘no va’ means “doesn’t go”…).

The most effective brands stand out and are distinctive, not being confused with others. If it’s important that your brand has the same name around the world, the more distinctive it is, the better. Made-up words are best (e.g. Kodak or Adidas).

Once you’ve cleared the linguistic/cultural issues, and undertaken relevant trade mark searches (in every country where the new brand is to be used), additional searches are recommended to ensure that domain names are not yet taken, and that brand peripherals such as Twitter and Instagram accounts etc. are all available.

A cleared brand name (and any related logo) should then be registered as a trade mark for appropriate goods/services. Importantly, simply registering a company name does not provide any enforceable rights, and does not mean that you are entitled to trade under the name or register it as a trade mark! A trade mark specialist should be consulted to ensure the correct protection is put in place, and to answer any branding queries you have.